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Council Caught in a Tight Spot on Development

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By Jorge Casuso

February 13, 2023 -- The City Council on Tuesday will face a volatile political dilemma -- change the unique nature of Santa Monica's four Neighborhood Commercial (NC) districts or open the floodgates to virtually unchecked State-sanctioned development.

Neighborhood residents, businesses and the Planning Commission are urging the Council to remove "upzoning" the NC districts from the 2021-29 Housing Element when it takes up the issue at a study session.

Allowing taller buildings on Main Street, Ocean Park Boulevard, Pico Boulevard and Montana Avenue will drive out small businesses that occupy the low-slung buildings and replace them with chain stores and housing in multi-story developments, opponents warn.

"These four walking Streets contain most of the neighborhood-serving, affordable businesses residents use in their daily lives," the Santa Monica Coalition for a Livable City (SMCLC) wrote in a letter urging opposition to the proposed zoning change.

"Residents don’t just rely on them –- they are a vital part of the fabric of our community that contribute to making Santa Monica feel special," the slow-growth group said.

The Planning Commission expressed the same concerns to the Council, adding that changing the character of the commercial districts is in "direct conflict" with the plan's mandated Fair Housing goals.

"Many of these small businesses are minority owned," the Commission wrote in a January 23 letter to the Council.

"Further, Neighborhood Commercial Districts currently offer entrepreneurial opportunities for local residents, many of whom are people of color."

City Staff, however, warned that following the Commission's recommendation to retain the existing zoning "would expose the City to risk of falling out of compliance with its adopted Housing Element as early as October 2023."

The consequences of failing to rezone the commercial districts would likely make the City "subject to consequences and penalties under State law," staff wrote in its report to the Council.

These include "the option for developers to file applications for “builder’s remedy” projects, ineligibility of grant funding, vulnerability to litigation from third parties, and enforcement actions by the State, potentially resulting in substantial fines."

The City saw serious consequences of failing to submit a compliant Housing Element when 16 projects totaling more than 4,500 units were rushed into the planning pipeline with little public input ("City Officials Caught Off Guard by Flurry of Development Submissions," October 13, 2022).

The move -- which came days before the State approved the City's revised Housing Element -- dealt a massive blow to local slow-growth activists who were caught off guard by the flurry of development proposals.

The City submitted its final draft to State officials one year after a divided Council on October 12, 2021 approved a plan to build 8,895 new units, 69 percent of them affordable, that was rejected by the State ("SPECIAL REPORT -- Housing Plan Delays Led to Loss of Local Control," October 14, 2022).

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